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Workshop #1 MT4 Basics

Posted:2021-03-26 11:50:01 Click:1868

Workshop - Introduction to MetaTrader 4 (MT4)



1. Introduction


MetaTrader4 (MT4) is one of the most commonly used retail finance trading platforms over the world. The most important reason is that it not only provides an online finance trading platform, more importantly, it provide a fully integrated platform for:

1) Chart Analysis

2) Technical Analysis via Technical Indicators and Oscillators

3) Fully integrated program trading development environment using MQL program trading language.


2. MT4 vs. MT5


MetaTrader 4, also known as MT4, is an electronic trading platform widely used by online retail foreign exchange speculative traders. It was developed by MetaQuotes Software and released in 2005.

The software is licensed to foreign exchange brokers who provide the software to their clients.

The software consists of both a client and server component.

The server component is run by the broker and the client software is provided to the broker’s customers, who use it to see live streaming prices and charts, to place orders, and to manage their accounts.

The client is a Microsoft Windows-based application that became popular mainly due to the ability for end users to write their own trading scripts and robots that could automate trading.

In 2010, MetaQuotes released a successor, MetaTrader 5.

However, uptake was slow and as of now most brokers still used MT4, especially in Asia.

So, in this course, we will focus on MT4 and MQL4 program trading language development and implementation.


3. Download MT4


MT4 software can be download from THREE sources:

1) MetaTrader.com

2) MetaQuote Software Inc.

3) Forex Brokers such as Forex.com and AvaTrade.com, Ironfx.com

Note:

1. All these platforms provides demo accounts for new users to try and testing before open actual account.

2. As mentioned in the lecture, one should be fully familiar with the MT environment, trading techniques and risk control and management before opening and use actual account for trading.

3. Also, for any new trading strategy, either manual or fully automated, it MUST be fully tested for at least 100 trading day before put it for actual operation.


4. Start MT4


Once you have registered the demo account and download the MT4 software, you can launch the MT4 program.

Below are the screenshots of MT4 program at 1) Forex.com and 2) AvaTrade.com 3), Ironfx.com


1) Forex.com


2) AvaTrade.com


3) 3) Ironfx.com


5. Main Features of MT4 application


1) The MT4 is a window-based program consists of FOUR sub-windows:

  • Product Quote Window (Market Watch) - Shows the list of trading products and their current Bid/Ask quotes. You can choose the products to be shown from the menu "View->Symbol".
  • Navigator Window - Shows the Account information (Login), Indicators (Technical indicators in use), Expert Advisors EA (Automatic MT4 Trading Programs), Scripts (Script programs).
  • Chart Window (main window) - A multi-windows to show the chart time series. One can choose different time frames, technical indicators and draw technical lines / symbol over it.
  • Terminal Window - A multi-windows to shows Trade Information, Market News, EA messages, etc.

2) Since it is both Market Watch, Technical Analysis and Trading Platform, every time when you launch the program, make sure that it is login into your desired account (e.g. demo account or actual account(s)) before doing ANY trading operations.

3) Once the system is launched, can whether it has successfully go online and connected to the trading server by the connection status bar on the bottom-right corner. If it doesn't go online, you can select to other trading server.

4) Most of the commands are self-descriptive. Only two important commands need to remind: 1) The "New Order" command - click it to place new order; 2) "Auto-Trading" command to trigger EA auto-trading. In other words, even if you have launch a EA program in the Navigator window, if you haven't click the auto-trading, auto-trading will not be performed.

5) The financial products are different depend on the MT4 platform you are using. But normally, a "standard" MT4 platform consists of:

- Major Forex Products (e.g. AUDCAD, USDCAD, USDJPY, etc.)

- Major Commodities (e.g. Gold, Silver, Corn, Cotton, etc.)

- Major Financial Indices (e.g HSI, DJI (or different names such as US30), Nasdaq, FT100, DAX, etc.)

For some platforms such as AvaTrade.com, it also provides Cryptocurrency trading such as BitCoin, ETH, ERP, Litecoin, etc.


6. Placing Order


To place an order, click "New Order" button.

The following figure show a new order window for Forex AUDCAD


6.1 TWO types of orders are provided: 1) Market Execution; and Pending Order

Market Execution order to execute the order AT ONCE by: 1) BUY order; 2) SELL order

Pending Order execute the order when the price reach a level (set by the user).


6.2 When you choose "Pending Order", there are FOUR different type of pending orders to choose.

They are: 1) Buy Limit; 2) Sell Limit; 3) Buy Stop; 4) Sell Stop (as shown).


FOUR Types of Pending Orders

  • Buy Limit — buy provided the future "ASK" price is equal to the pre-defined value. The current price level is higher than the value of the placed order. Orders of this type are usually placed in anticipation of that the security price, having fallen to a certain level, will increase;
  • Buy Stop — buy provided the future "ASK" price is equal to the pre-defined value. The current price level is lower than the value of the placed order. Orders of this type are usually placed in anticipation of that the security price, having reached a certain level, will keep on increasing;
  • Sell Limit — sell provided the future "BID" price is equal to the pre-defined value. The current price level is lower than the value of the placed order. Orders of this type are usually placed in anticipation of that the security price, having increased to a certain level, will fall;
  • Sell Stop — sell provided the future "BID" price is equal to the pre-defined value. The current price level is higher than the value of the placed order. Orders of this type are usually placed in anticipation of that the security price, having reached a certain level, will keep on falling.

Noted that:-

1) Buy-Limit and Sell-Limit are normally used when you expect the market will reverse when it reach/drop to a certain levels (e.g. Support and Resistance Levels).

2) Buy-stop and Sell-stop are normally used when you expect the market will breakout at a certain level, e.g. Head-&-Shoulder breakout, S/R breakout, trendline breakouts, etc.

6.3) The size of investment is selected by "Volume". E.g. 1.0 means 1 Lot, 0.1 means 0.1 Lots, etc.

6.4) The product information can be found by clicking "View-Symbol-Properties" command. The following figure shows the product table for Forex AUDUSD.



Note: This table shows contract size, digits, spread and trading period of the product. Please check carefully before you place the order.

6.4) Risk Control and Management - As mentioned in the lecture, risk control and management is a vital factor for financial investment, especially for Forex & Cryptocurrencies. MT4 system allows users to set the Stop-Loss (SL) and Take-Profit (TP) Levels when you place the execution and pending orders. As a general reminder, remember to set the Stop-Loss (SL) EVERYTIME when you place an order. The Take-Profit (TP) is optional.

6.5) As an experiment, use your demo account:

- Place a BUY execution order of AUDCAD, volume 0.1 Lot, set the SL=150 pts, TP=300 pts.

6.6) One can also use single product hedge order instead of Stop-Loss for risk control.

- How to do it?

- Place the Hedge Order for AUDCAD as a experiment. See the result next day.


7. Chart Analysis


7.1 Below shown the Daily chart for XAGUSD (Silver-USD)


Use your MT system, open the same Daily chart.

On the chart, identify and draw:

1) All the Support/Resistance Levels

2) All the trendlines/channels

3) Any special reversal pattern such as Key Reversals, Head-&-Shoulder, Ascending and Descending Triangles.

What can you tell the current trend? Uptrend? Downtrend? Oscillation? WHY?

7.2 Below shown the Daily chart for US-Oil, Dow Jones and Hang Seng Indices.

1) Open these charts in your MT4 system (make sure is Daily chart)

2) Perform the same chart analysis as of 7.1.

3) It is usually said US-OIL, Silver/Gold, DJI is closely related. Discover any confirmation / divergence pattern against these three product from the Daily charts.

4) Also, check for the Confirmation / Divergence patterns between HSI and DJI.


US Oil


Hang Seng Index (HSI / HS50)


Dow Jones Index (DJI / US30)


8. Fibonacci Retracement


As mentioned in the lecture, Fibonacci Series is a commonly used tool in financial analysis. For chart analysis, Fibonacci Series is commonly adopted for locating the Support / Resistance lines via Fibonacci Retracements.

MT4 provides an easy and useful graphical tool to help us to perform Fibonacci Retracements via simple match-and-clicks.

The following figure shown a the Fibonacci Retracements for Forex USDJPY


8.1) Locate the Fibonacci Retracement Tool from your MT4 System.

8.2) For the previous FOUR charts, using Fibonacci Retracement to locate the S/R Lines.

8.3) Check against your previous S/R lines, any findings?

8.4) Finally, switch to the H4 charts. Perform the same chart analysis again. What is your findings? Any conclusion to make?




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